Ulta Beauty posts strong Q2, raises outlook
Ulta Beauty’s momentum continued during the second quarter.
The beauty giant reported top- and bottom-line results that topped Wall Street estimates and raised its full-year forecast. On the earnings call, CEO Kecia Steelman said Ulta’s sales outpaced the U.S. beauty market in a dynamic environment, and that active members in the company’s loyalty program increased by 3% to about 47 million, with higher average spending per member. She also cited the success of the company’s TikTok initiative.
“Since the launch, our TikTok initiative has driven over 100 million impressions,” Steelman told analysts. “Notably, we are attracting significant attention from brand partners who are interested in joining our TikTok Shop assortment and from creators who are interested in collaborating with the Ulta Beauty brand. We are pleased with the ongoing success of TikTok, the initiative, and the competitive differentiation that [it] is enabling for Ulta Beauty.
Ulta released its results as its collaboration with Target comes to an end. Last August, the companies announced that they had mutually agreed not to renew the Ulta Beauty at Target shop-in-shop partnership when the current agreement ends in August 2026. Target plans to roll out its own in-store beauty studio concept in September.
"We expect the battle for share to remain intense," Steelman told analysts in response to Target's new initiative. "Our job isn’t to chase competitors. It’s to really lean into what differentiates Ulta Beauty and execute it even better.”
Second Quarter
Ulta's earnings per share rose 13.3% to $6.55 for the quarter ended Aug. 1, above analysts’ estimates of $6.20 per share. Net income rose 9.3% to $282 million.
Second-quarter net sales rose 8.9% to $3 billion, driven by increased comparable sales, the acquisition of Space NK and sales from new stores. Analysts had expected sales of $2.98 billion.Comparable sales were up 3.8%.
“Our team delivered another impressive quarter of strong sales, profit, and earnings growth, demonstrating that we are executing with discipline and translating our Ulta Beauty Unleashed strategy into tangible benefits for our guests,” stated Steelman in the earnings release. “With our strong first-half performance, we have raised our financial guidance for the year, reflecting our confidence in our strategic priorities and our ability to drive profitable growth and long-term value for all stakeholders in a dynamic environment."
During the quarter, teen apparel retailer Pacsun partnered with Ulta to launch an exclusive fashion and beauty collaboration. Also during the quarter, Bath & Body Works announced it would bring a curated selection of its “most-loved” products to more than 600 Ulta Beauty stores nationwide and Ulta.com.
The company updated its net sales forecast for the year. It now expects net sales growth of 6.7% to 7.2% for the full year, compared with its previous forecast of 6% to 7%. Comparable sales are expected to grow from 3.2% to 3.7%, up from an earlier range of 2.5% to 3.5%.
Ulta ended the quarter with 1,534 U.S. stores and 88 international stores, for a total of 1,622 locations.
